No matter how small your business is, solo ran or not, you need to get the business basics right. Today i’m touching on operations management.
In order for a business to produce goods or services, the business must define the 3 core functions, namely; Marketing, Operations and Finance.
Marketing Function – This is about how the business will generate demand for the goods and services.
Operations Function – This is about how the business will manage people, equipment, technology, material and the information of the organization. (to produce the goods and services)
Finance Function – This is about how the business will manage the cash flow, current assets and capital investments.
No matter the size of your organization, it is imperative that you’re clear on the top 3 business functions.
Some of the critical decisions you need to make as a business owner when it comes to Operations Management:
Design of goods and services – What we should offer and how should we design our product and services?
Quality Management – How do we define quality, how does our prospects and industry define quality, what is our quality, and who is responsible for quality management?
Process and Capacity Design – What process and capacity will these products require and what equipment and technology is necessary for production?
Supply chain management – Who are the key stakeholders on our supply chain, what does each provide, how can we make the chain more effective and efficient, should we make or buy or outsource this component, How much inventory is needed of each item and how often do we reorder?